flash ez pmi mar 2012

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News Release

Purchasing Managers’ Index ®

MARKET SENSITIVE INFORMATIONEMBARGOED UNTIL: 0900 (UK Time) 22 March 2012

Markit Flash Eurozone PMI ®

Eurozone slides back into recession as output falls at stronger rate in March

Flash Eurozone PMI Composite Output Index(1)

at48.7 (49.3 in February). 3-month low.

Flash Eurozone Services PMI Activity Index(2)

at

48.7 (48.8 in February). 4-month low.

Flash Eurozone Manufacturing PMI(3)

at 47.7(49.0 in February). 3-month low.

Flash Eurozone Manufacturing PMI OutputIndex

(4)at 48.8 (50.3 in February). 3-month low

Data collected 12–21 March.

The Markit Eurozone PMI ®

Composite OutputIndex fell from 49.3 in February to a three-monthlow of 48.7 in March, according to the preliminary‘flash’ reading, which is based on around 85% of

usual monthly replies. The latest reading signals acontraction in business activity for the secondsuccessive month, and the sixth decline in the pastseven months.

Output fell on average over the first quarter of 2012,albeit to a lesser extent than in the final quarter of2011. Nevertheless, the PMI therefore suggeststhat the Eurozone has slipped back into a technicalrecession, defined as two consecutive quarters offalling output

Markit (Flash) Eurozone PMI and GDP

30

35

40

45

50

55

60

65

'05 '06 '07 '08 '09 '10 '11 '12

-3.0

-2.0

-1.0

0.0

1.0

2.0

PMI

GDP

Eurozone GDP quarterly % changeMarkit Composite Eurozone PMI

Sources: Markit, Eurostat.

Both manufacturing output and service sectoractivity contracted in March, showing the worstperformances for three and four monthsrespectively. However, in both cases, the rates of

decline were only very modest.

Output rose in Germany, but the rate of growthslowed to a three-month low to show only amarginal gain. Output meanwhile fell slightly inFrance for the first time in four months, anddropped sharply again in the rest of the region.

Core v. Periphery PMI Output Index

30

40

50

60

70

Jan

99

Jan

00

Jan

01

Jan

02

Jan

03

Jan

04

Jan

05

Jan

06

Jan

07

Jan

08

Jan

09

Jan

10

Jan

11

Jan

12

Germany

France

Rest of Eurozone

PMI Composite Output Index, 50 = no change on previous month

Manufacturing output

0

10

20

30

40

50

60

70

'98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12

-10

-8

-6

-4

-2

0

2

4

PMI Output Index

Industrial production excl. construction

Markit Eurozone PMI Output Index Eurostat, 3m/3m%chg


Incoming new business fell for the eighthsuccessive month, deteriorating at the fastest ratesince December. Renewed declines in France andGermany were accompanied by a sharper rate ofcontraction elsewhere (on average). The rate ofdecline of new orders also exceeded that for output,causing backlogs of work to fall for the ninthsuccessive month. This is likely to put furtherdownward pressure on output levels in April.

New orders fell at the fastest rate for three months in

of 5 © Markit Economics Limited 2012



both manufacturing and services. Goods producers

reported the steeper rate of decline, as fallingdomestic demand was exacerbated by a ninthconsecutive monthly drop in new export orders.

Manufacturing orders

15

20

25

30

35

40

45

50

55

60

65

70

'98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12

-20

-15

-10

-5

0

5

10

Eurozone Manufacturing PMI New Orders Index

Eurostat new orders

Markit Eurozone PMI New Orders Index Eurostat, 3m/3m %


Companies cut employment levels for the thirdmonth in a row, contrasting with rising headcountsover the prior 20 months. The rate of job losseswas only very modest, but nevertheless the highestfor two years.

Service sector employment fell for the third monthin a row, dropping at a rate identical to the modest

falls seen in the first two months of the year.Meanwhile, manufacturing headcounts fell for thefourth time in the past five months, with job lossesrunning at the fastest rate since March 2010.

Employment barely rose in Germany, contrastingwith the strong growth seen throughout last yearand showing the weakest increase for two years.Payroll numbers meanwhile fell for the first timesince last September in France, albeit onlymarginally. Steep job losses were again seen in therest of the euro area, though the average rate ofdecline eased to a six-month low.

Employment

35

40

45

50

55

60

65

Jan

99

Jan

00

Jan

01

Jan

02

Jan

03

Jan

04

Jan

05

Jan

06

Jan

07

Jan

08

Jan

09

Jan

10

Jan

11

Jan

12

Germany

France

Rest of Eurozone

PMI Compos ite Employment Index, 50 = no change on previous m onth

Source: Markit.

Input prices showed the steepest rise since last

June, although the rate of inflation merely matchedthe long-run average seen over the 14-year historyof the survey. Manufacturing raw material pricesrose at the fastest rate for nine months whileservice sector cost inflation hit a three-month high.Both in part reflected the impact of higher oil pricesin many cases.

Prices charged fell very marginally for the fourthconsecutive month, as weak demand oftenprevented firms from passing higher costs on tocustomers, especially in the service sector.

A ray of hope that the downturn may prove short-

lived was provided by service providers’expectations for growth over the coming year improving for the fifth successive month to signalthe highest degree of optimism since last July.Confidence improved in both France and Germany,but fell back slightly in the rest of the region.

Commenting on the flash PMI data, ChrisWilliamson, Chief Economist at Markit said:

“The Eurozone economy contracted at a faster rate in March, suggesting that the region has fallen back into recession, with output now having fallen in both the final quarter of last year and the first quarter of

2012. The downturn is only very mild at the moment, with the PMI signalling a drop in GDP of approximately 0.1-0.2%, and an upturn in business confidence in the service sector provides hope that conditions may improve again later in the year.However, firms are clearly focusing on cost reduction, with employment falling at the fastest rate for two years as inflows of new business continued to deteriorate, reflecting weak demand across the region.

“Even hiring in Germany has almost ground to a halt due to a further drop in new business,suggesting that the brief improvement in business conditions seen at the start of the year is running out of steam. French companies meanwhile reported a drop in activity for the first time in four months, and the first cut in staffing levels since last September. Germany and France look to have avoided a return to recession, but only by very narrow margins.

“Elsewhere in the Eurozone the situation is worse,with both business activity and employment falling sharply again in March.

“The further drop in the PMI is clearly a disappointment following the brief return to growth seen in January, and suggests that policymakers will need to seek ways to revive economic growth across the region again.”

-Ends- of 5 © Markit Economics Limited 2012



Output

30

35

40

45

50

55

60

65

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Services Manuf acturing Composite

Eurozone PMIs - Output

New business

25

30

35

40

45

50

5560

65

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


Eurozone PMIs - New Business

Employment

30

35

40

45

50

55

60

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


Eurozone PMIs - Employment

Input prices

20

30

40

50

60

70

80

90

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


Eurozone PMIs - Input Prices

Output prices

35

40

45

50

55

60

65

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


Eurozone PMIs - Output Prices

Source: Markit.

Summary of March data


Output Composite Output fell for second monthrunning (48.7).

Services Activity fell for sixth time inseven months.

Manufacturing Production fell for first time inthree months.

New Orders Composite New business fell for eighthmonth running, and atfastest rate since December.

Services New business fell at fastestrate in three months.

Manufacturing New orders fell for tenthconsecutive month, and atfaster pace.

Backlogs of Work Composite Outstanding business downfor ninth straight month.

Services Ninth successive monthlydecline.

Manufacturing Backlogs fell for tenth monthrunning.

Employment Composite Jobs declined for thirdmonth running, and atfastest pace since March2010.

Services Employment fell marginally forthird month running.

Manufacturing Employment fell at fastest ratesince March 2010.

Input Prices Composite Input price inflationaccelerated to nine-monthhigh.

Services Input cost inflation acceleratedslightly to three-month high.

Manufacturing Input price inflation acceleratedto nine-month high.

Output Prices Composite Output prices down slightlyfor fourth successive month.

Services Charges fell at marginal pace.

Manufacturing Output price inflation remained

subdued.

PMI(3)

Manufacturing PMI below 50.0 for eighthmonth running, and eased tothree-month low (47.7).



32

37

42

47

52

57

62

67

72

2005 2006 2007 2008 2009 2010 2011 2012

-2.0

-1.0

0.0

1.0

2.0

PMI

GDP

French GDP q/q % changeMarkit Composite PMI (France)

25

30

35

40

45

50

55

60

65

70

'05 '06 '07 '08 '09 '10 '11 '12

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

PMI

GDP

German GDP quarterly % changeMarkit Composite PMI (Germany)

For further information, please contact:

MarkitChris Williamson, Chief Economist Rob Dobson, Senior EconomistTelephone +44-20-7260-2329 Telephone +44-1491-461-095Mobile +44-779-555-5061 Mobile +44-782-691-3863Email [email protected] Email [email protected]

Rachel Harling, Corporate Communications

Telephone +44-20-7064-6283Mobile +44-782-7891-072Email [email protected]

Note to Editors:

Final March data are published on 2 April for manufacturing and 4 April for services and composite indicators.

The Eurozone PMI ® (Purchasing Managers' Index ® ) is produced by Markit and is based on original survey data collected from arepresentative panel of around 4,500 companies based in the euro area manufacturing and service sectors. National manufacturing dataare included for Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece. National services data areincluded for Germany, France, Italy, Spain and the Republic of Ireland. The flash estimate is typically based on approximately 85%–90% oftotal PMI survey responses each month and is designed to provide an accurate advance indication of the final PMI data.

The average differences between the flash and final PMI index values (final minus flash) since comparisons were first available in January

2006 are as follows (differences in absolute terms provide the better indication of true variation while average differences provide a betterindication of any bias):

Average Average differenceIndex difference in absolute terms

Eurozone Composite Output Index1 0.0 0.2


mailto:[email protected]









Eurozone Manufacturing PMI 3 0.0 0.2Eurozone Services Business Activity Index2 0.1 0.3

The Purchasing Managers’ Index ® (PMI ® ) survey methodology has developed an outstanding reputation for providing the most up-to-datepossible indication of what is really happening in the private sector economy by tracking variables such as sales, employment, inventoriesand prices. The indices are widely used by businesses, governments and economic analysts in financial institutions to help betterunderstand business conditions and guide corporate and investment strategy. In particular, central banks in many countries (including theEuropean Central Bank) use the data to help make interest rate decisions. PMI ® surveys are the first indicators of economic conditionspublished each month and are therefore available well ahead of comparable data produced by government bodies.

Markit do not revise underlying survey data after first publication, but seasonal adjustment factors may be revised from time to time asappropriate which will affect the seasonally adjusted data series. Historical data relating to the underlying (unadjusted) numbers, firstpublished seasonally adjusted series and subsequently revised data are available to subscribers from Markit. Please [email protected].

Notes1. The Composite Output PMI is a weighted average of the Manufacturing Output Index and the Services Business Activity Index.2. The Services Business Activity Index is the direct equivalent of the Manufacturing Output Index, based on the survey question “Is the level of business activity at your company higher,

the same or lower than one month ago?”3. The Manufacturing PMI is a composite index based on a weighted combination of the following five survey variables (weights shown in brackets): new orders (0.3); output (0.25);

employment (0.2); suppliers’ delivery times (0.15); stocks of materials purchased (0.1). The delivery times index is inverted.

4. The Manufacturing Output Index is based on the survey question “Is the level of production/output at your company higher, the same or lower than one month ago?”

About MarkitMarkit is a leading, global financial information services company with over 2,300 employees. The company provides independent data,valuations and trade processing across all asset classes in order to enhance transparency, reduce risk and improve operational efficiency.Its client base includes the most significant institutional participants in the financial market place. For more information, seehttp://www.markit.com/en/ .

About PMIsNow available for 32 countries and key regions including the Eurozone, Purchasing Managers’ Index ® (PMI ® ) surveys have become themost closely-watched business surveys in the world, favoured by central banks, financial markets and business decision makers for theirability to provide up-to-date, accurate and often unique monthly indicators of economic trends. To learn more go towww.markit.com/economics.

The intellectual property rights to the Flash Eurozone PMI ®

provided herein is owned by Markit Economics Limited. Any unauthorised use, includingbut not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markit’s prior consent. Markit shallnot have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions ordelays in the data, or for any actions taken in reliance thereon. In no event shall Markit be liable for any special, incidental, or consequentialdamages, arising out of the use of the data. Purchasing Managers' Index

® and PMI

® are registered trade marks of Markit Economics Limited. Markit and

the Markit logo are registered trade marks of Markit Group Limited.


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flash ez pmi mar 2012

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